Despite all the buzz, millennials are on track to be the least entrepreneurial generation in the last century, according to Entrepreneur Magazine. While millennials are not lacking in entrepreneurial spirit or drive, they are bogged down by several factors that are somewhat unique to their generation.
First, there’s the debt issue. College costs have skyrocketed, leaving graduates deeper in debt every year. The average student debt in 2016 ($37,172) grew by 6 percent over the previous year and shows no sign of slowing. At the same time, millennials have been told by society that the only guarantee to job security is a college degree. As a result, college graduates no longer have as much of a competitive advantage and increasingly find themselves unemployed or underemployed as they struggle to pay off their student loans. These are not ideal circumstances for investment in a new business.
Afraid of failure, millennials are also less likely than previous generations to take risks.
They grew up with society’s mantra of “follow your heart” and were shielded by their parents and coaches from the blow of failure. Smith College in Massachusetts even launched an initiative called “Failing Well” to “destigmatize failure” for its students who lacked “resilience.”
This could be a side effect of the Great Recession, during which many millennials watched their parents’ and friends’ homes foreclose and some of their favorite local shops fail. Moreover, a large number of them graduated during the height of the recession.
Startups are not for the faint of heart, and the experience leaves a lasting impression on those who endured it.
Lastly, Entrepreneur blames oligopolies for scaring away millennials from their entrepreneurial aspirations. The tech industry is dominated by large companies like Facebook and Google, who are constantly eating up market share, leaving smaller companies with two options: sell out or go bust. It can be nearly impossible for a cash-strapped, budding company to gain market share under these conditions.
New businesses generate almost all net new jobs in the U.S., and someone has to start them. As the Trump administration works to generate job growth and boost GDP, its success will depend on millennial entrepreneurs and the new businesses they create. Without them, our country’s growth will continue to lag.
Brendan Pringle (@BrendanPringle) is a freelance journalist in California. He is a National Journalism Center graduate and formerly served as a development officer for Young America’s Foundation at the Reagan Ranch.
